Pay-outs cap in bid to end ‘compo culture’

A CAP on compensation payouts for whiplash and other soft tissue injuries is recommended in a major Government report to be published today, the Irish Independent understands.

A long-awaited study of the country’s ‘compo culture’ also advises a time limit should be enforced for claims being lodged against businesses.

It found that many claimants wait until they believe CCTV footage has been destroyed before suing retailers.

The Data Protection Commissioner currently stipulates that it is “difficult to justify retention [of video footage] beyond a month”.

However, a source familiar with the Cost of Insurance Working Group’s report said this is leaving shops exposed to bogus claims for slips and falls.

It is understood the report makes 15 recommendations aimed at reducing insurance costs for business.

A key outcome will be a request from Minister of State Michael D’Arcy for the Law Reform Commission to undertake a detailed analysis of ways to cap damages a court may award in respect of personal injuries.

Ireland has some of the highest pay-outs for minor neck injuries in the world, with awards up to €19,400.

Compensation for more serious neck injuries can range between €76,000 and €139,000.

A source said the pay-outs are driving up costs and must be addressed – but further work is needed as there may be constitutional challenges to enforcing a broad cap.

The group has also noted that at the other end of the scale Irish courts make relatively low compensation awards in cases of life-changing injuries.

Businesses are likely to welcome the recommendation that they must be notified “in sufficient time” that an incident has occurred.

It is not clear what time limit will be enacted for making claims but it is likely to be linked into current data protection rules.